Financial Stress in Family Business

How do you balance your finances? Do you have a spreadsheet? An accountant? Is it someone else’s problem? Well, I’m here to tell you that it shouldn’t be. Even if you aren’t the primary in the business taking care of the finances, if you are either a shareholder or part-owner, it should be something you are aware of.

The reason being is that understanding the finances of your business helps you to know the progress it’s making. It’s what we call one of the key performance indicators (KPIs). KPIs help you stay on top of whether your business is doing well or if you need to put more effort into one area of another (for example, sales or customer engagement). Most importantly, knowing your business financials can help you manage the stress of running a business, especially a family business. Not only is it good for your business metrics but knowing your business’ finances also helps you understand how the money is being divided for the business, and among your family members– if it’s being divided evenly or fairly. If you don’t know how much is going in, it’s harder to track how much is coming out as well. By getting comfortable with the numbers in your business, it allows you to share the wealth appropriately, allows your business to grow safely and gives the opportunity to save for emergencies (for example, a health crisis, a recession… a pandemic…). 

One of the most common stressors that individuals complain about – whether they own a business or not – is Finance. That only gets worse when you combine finance and family; and even though it’s out of our bodies, this stressor can manifest in physical ways:

• Trouble sleeping at night
• Poor eating habits
• Weight gain
• Anxiety and Panic attacks

All the concerns above won’t end you up in the hospital, but they can build up to become something much worse that could. If you are not careful and being mindful of your health as you watch your business KPIs, those will be the least of your problems. Lucky for you, there are some simple things you can do to help with each of these individually,

• Try to get yourself on a sleep schedule: start with waking up at the same time every morning)
• Support your nutrition: eating whole foods, bright colours and a good amount of protein 
• Go out for daily walks and spend time in nature: research shows that it helps to improve your mood and supports your metabolism function
• Breathing techniques: calming your breath can help to calm your entire body and remind it that you are safe and not in life-threatening danger.

HOWEVER, these solutions might only be short-lived. If you don’t get to the root cause (understanding the money and staying on top of it), then the stress signals will keep coming back in other ways. So, here are some tips to manage your stress by staying on top of your business finances: 

• Have the conversation: It’s important to talk to your business partners, family members and all those involved so you stay on the same page with each other. It might be an uncomfortable conversation to have, but everyone working together to manage the money is key.
• Track your finances using your bank account or a banking app: There are many banking and accounting apps that are available to download that can help you track your transactions. If you don’t want to use so much tech, a simple spreadsheet on paper or Excel will do the trick
• Hire an advisor: Especially if you don’t know where to start, hiring a financial advisor to get you started or help you manage those uncomfortable conversations can truly be a life saver. Having someone in your corner watching our for your family and your business will help take the weight off your shoulder so you can continue to enjoy the process.

This isn’t only for the health of your business, but for your health as well. Making sure you are in good health helps to make sure that you are in the right headspace in order to make the best decisions for your business. Because when you’re healthy, your family is healthy, and your legacy stays healthy.